American Institute of Certified Public Accountants (AICPA): Represented the interests of AICPA in several litigation matters, including:
- AICPA & NYSSCPA: In a decision shaped by our amicus brief on behalf of the AICPA and the NYSSCPA, the New York Court of Appeals handed a major victory to accounting professionals by clarifying the scope of the imputation doctrine, the in pari delicto defense, and the “adverse interest” exception in the context of suits by companies against their auditors for failing to prevent management fraud. The decision came on questions certified by two different courts in which shareholder plaintiffs argued that the misconduct of their companies’ respective managers should not be imputed to their companies because the managers had sought to benefit themselves through increased compensation or inflated stock value, and therefore were acting adversely to their employers.
Austin Industries. v. William M. Mercer, Inc.: Represented Mercer, a wholly owned subsidiary of Marsh & McLennan, in a professional malpractice suit related to its actuaries.
In re The Bear Stearns Companies Inc. Securities, Derivative, and ERISA Litigation (S.D.N.Y.): Represented Bear Stearns senior official in class action litigation and related matters arising out of writedowns of subprime-related financial instruments and events leading to acquisition by JPMorgan.
In re Bennett Companies Investors Litigation, No. 96-601927 (N.Y.S. Ct.): Represented defendant broker in $570 million securities class action arising out of alleged accounting irregularities and Ponzi scheme at Bennett Funding.
Bielfeldt v. KPMG: Secured an appellate victory for KPMG that reversed and vacated in its entirety a $17.6 million jury verdict that found for a plaintiff alleging KPMG was negligent in its preparation of his tax returns causing him $300 million in damages.
Big Four Accounting Firm: Serving as National Coordinating Counsel for a Big Four accounting firm in its civil tax shelter litigation and related federal and state governmental investigations. From 1997 through 2001, the accounting firm sold tax shelters to hundreds of wealthy individuals. Many of these shelters were subsequently disallowed by the IRS. Former tax shelter clients have sued the firm in cases brought all over the country, seeking fees, transaction costs, back taxes, interest, and penalties totaling in the billions of dollars. As National Coordinating Counsel on these matters, we directly represent the accounting firm as lead counsel on many of the matters, and also reviews and directs the work of many prominent national and regional law firms that are defending the accounting firm in other individual tax shelter cases and related governmental investigations across the country.
Brice, Vander Linden & Wernick, P.C.: Representing Brice, Vander Linden & Wernick, P.C. in a U.S. Trustee investigation of structured financing transaction issues.
Duoyuan Global Water, Inc./Grant Thornton Ltd.: Represented leading accounting advisory company Grant Thornton International in a securities class action against Duoyuan, a China-based water treatment technology supplier, and its auditors and others alleging the perpetration of a fraud in connection with DGW’s U.S. IPO and a follow-on share offering. Willkie successfully obtained a dismissal in the securities class action and the complaint against Grant Thornton.
In re Fannie Mae Securities Litigation, No. 1:04-CV-01639 (D. D.C.): Representing auditor in audit committee investigation, securities class actions, derivative litigation, and SEC proceedings arising out of accounting issues at Fannie Mae.
Footstar, Inc. Securities Litigation: Represented defendant accounting firm in $65 million securities class actions, shareholder derivative litigation, and bankruptcy litigation arising out of accounting issues at Footstar.
Former Ernst & Young LLP Audit Partner: Successfully secured dismissal after an 8-day administrative hearing of SEC allegations of improper professional conduct against former Ernst & Young LLP audit partner.
Global Accounting Firm, Foreign Affiliate: Representing a foreign member of a global accounting firm network in an SEC enforcement investigation relating to potential independence matters, auditing issues and financial fraud regarding a foreign company client registered with the SEC.
GSP Finance LLC v. KPMG LLC: Represented KPMG in an action stemming from the financial challenges and bankruptcy of the Texas Rangers. In a suit filed in the New York State Supreme Court in March 2011, lender GSP Finance alleged that KPMG disregarded its professional duties and committed fraud in 2007 by issuing a clean audit for the Rangers’ owner Hicks Sports one year before they defaulted on a loan, thereby preventing Hicks Sports’ lenders from recovering the full value of their loans.
The Hartz Mountain Corp. v. BDO Seidman, LLP, No. 96 Civ. 3042 (S.D.N.Y): Represented BDO Seidman in $15 million securities action arising out of tender offer for nonpublic company.
H&R Block: Successfully represented H&R Block in its motion to dismiss a suit brought by a class of investors who alleged that Block committed securities fraud by concealing from investors 20 class action lawsuits relating to the company’s Refund Anticipation Program (RAL). The suit, which was brought under Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934, was particularly significant because it adopted the little-used “truth on the market”' defense to a securities fraud claim.
H&R Block/2SS Holdings: Representing H&R Block in its response to the DOJ’s civil suit seeking to block a $288 million deal by H&R Block to acquire 2SS Holdings, maker of TaxAct software.
Just For Feet, Inc. Securities Litigation: Represented defendant accounting firm in $1.1 billion securities class actions, Alabama state court proceedings, bankruptcy trustee litigation, and parallel SEC and Department of Justice investigations arising out of accounting issues at Just For Feet.
Kemin Industries, Inc. v. KPMG Peat Marwick, No. 96-1093 (S. Ct. IA): Represented AICPA as amicus curiae participant before Iowa Supreme Court in appeal seeking to overturn jury verdict in action against accounting firm brought by Kemin Industries.
Kirschner v. KPMG LLP and Teachers’ Retirement System of Louisiana v. PricewaterhouseCoopers LLP: Represented AICPA and the NYSSCPA as amicus curiae before the New York Court of Appeals in obtaining clarification of the scope of the imputation doctrine, the in pari delicto defense, and the "adverse interest" exception in the context of suits by companies against their auditors for failing to prevent management fraud.
KPMG, Anadarko Petroleum Corporation/Deepwater Horizon: Representing KPMG in an SEC investigation into the contingent liability accounting of its audit client Anadarko Petroleum in connection with the 2010 Deepwater Horizon explosion in the Gulf of Mexico.
KPMG: Secured an appellate victory for KPMG that reversed and vacated in its entirety a $17.6 million jury verdict that found for a plaintiff alleging KPMG was negligent in its preparation of his tax returns causing him $300 million in damages. (The lower court had reduced the jury’s verdict to $9.9 million.) Both sides appealed. In the lengthy opinion that borrowed heavily from Willkie’s appellate briefs, the Illinois court of appeals held that the plaintiff “failed to prove the essential element of quantifiable injuries and measurable damages . . . .” Specifically, the court of appeals stated: “the purported financial injury resulting in overpaid taxes based on the rejected amended tax returns [i.e., the claimed tax refunds] was purely hypothetical” and described the plaintiff’s trial evidence as “speculative.”
Sharp International Corp. v. KPMG LLP: Represented KPMG in professional malpractice cases brought by bankruptcy trustee and lenders of defunct watch company.
William Fry/Madoff Feeder-Funds Litigation: Secured federal court dismissal, on the basis of forum non conveniens, of claims against Irish law firm William Fry brought by a proposed class of investors in Madoff feeder-funds. Plaintiffs alleged that defendants, as lawyers to certain foreign funds that steered money to Madoff entities, aided and abetted breaches of fiduciary duty and unjust enrichment. The gravamen of the case was that defendants ignored a multitude of red flags that should have caused them to discover Madoff’s fraud, conduct further due diligence, and/or alter investment decisions with respect to Madoff Securities.